(February 15, 2006)

Classified U.S. diplomatic cables, leaked by the whistleblower site WikiLeaks, contained reports that the Israeli Ministry of Defense was evaluating and prioritizing foreign assistance projects in the Palestinian territories to determine which should continue to receive support to maintain stability and ensure that basic humanitarian needs of the Palestinians were met.

1. (S) The MOD is evaluating and prioritizing all foreign assistance projects in the Palestinian territories in order to determine which should have continued support from the MOD, Brig. General (res.) Baruch Spiegel told POL and ECON counselors on February 14. Minister of Defense Mofaz had ordered Gen. Mishlev, head of COGAT, to initiate the process with Spiegel three weeks ago. Spiegel said they would place the projects into three categories: high, medium, and low priority. Despite the uncertainty following the recent Palestinian Legislative Council elections and the Israeli Cabinet decision that the GOI will not talk to Hamas, Mofaz believes it is in Israel's interest to maintain stability and ensure that basic humanitarian needs of the Palestinians are met.

2. (S) Spiegel said that he has been meeting with foreign donors to discuss their projects and to hear their views regarding which should be retained. The main standard the MOD is using, said Spiegel, is whether a project benefits the Palestinian people. He said that environmental projects, and those dealing with water, sewage, and electrification, for example, should continue. (Note: Spiegel told USAID director in a separate meeting on February 13 that projects that promoted private sector jobs for Palestinians are also a priority. End note.) Consideration is also being given to a project,s benefit to Israel. Spiegel pointed to projects such as the French electrification project in Jenin, road construction, and the Hebron sewage treatment plant as examples of projects that benefited the Palestinians and had a direct impact on Israel and which he would recommend for continuation. The MOD's concerns with the continuation of certain projects are all based on legal status and security, he said.

3. (S) Spiegel said that his office will draw up a list as quickly as possible of prioritized assistance projects that should be continued and present it to MOD Mofaz to be discussed with Acting PM Olmert. Although the listing will serve only as a guideline, Spiegel believed that his recommendations and philosophy would be taken very seriously. Spiegel planned to meet with USAID and Embassy officers next week to review the projects. (Note: USAID director will meet with Gen. Mishlev on February 19 to discuss USAID-funded projects. End note.)

4. (S) Comment: If the process that Spiegel described is, in fact, used, the MOD may be planning to take a very practical and humanitarian approach to assistance to the Palestinians. Instability or a humanitarian crisis in the territories is in no one,s interest, least of all Israel's. Clarifying GOI priorities and explaining which assistance projects are acceptable for continuation will benefit the Department during this period of uncertainty. While this practical approach by the MOD bodes well for continued assistance to the Palestinians, it does not necessarily translate into Israeli support for many USAID assistance projects. As can be seen from Spiegel's examples, the MOD is most interested in preserving programs that also offer significant benefit for Israel, such as sewage treatment. Not all of the most effective U.S. projects can be characterized as dual use, and there is a decided lack of attention in the MOD's calculus to programs for democracy development.